G. TAXPAYER INQUIRIES

Transcription

1 E. RELIEF FROM PENALTY FOR FAILING TO FILE PARTNERSHIP RETURN BY MAGNETIC MEDIA Any partnership that is an affected taxpayer, as defined in Notice and this notice, and that is required to file a partnership return by magnetic media (electronically) under section 6011(e) will not be assessed a penalty under section 6721 for failing to file the partnership return electronically if the partnership elects to file a paper return. This relief is for partnership returns that have an original due date or extended due date (not a postponed due date under section 7508A) on or after September 11, 2001, and on or before November 30, Taxpayers who qualify should write September 11, 2001 Terrorist Attack in red ink on the top of their paper Form The IRS will abate any penalty that is improperly assessed. F. ACTS PERFORMED BY THE GOVERNMENT (1) If the last date otherwise prescribed by law for making a tax assessment is on or after November 2, 2001, and the taxpayer received a 120-day postponement of time to file a Tax Court petition under paragraph (4) of the Grant of Relief section of Notice , then the last date otherwise prescribed by law for making an assessment is correspondingly postponed by 120 days. This additional time for making an assessment is needed for the following reason. Under section 6503, the period of limitations on assessment is suspended when a statutory notice of deficiency is mailed. The section 6503 suspension period (generally 150 days) includes the period (generally 90 days) after the issuance of a statutory notice of deficiency during which the taxpayer is permitted to file a Tax Court petition and the IRS is prohibited from making an assessment. See I.R.C. 6213(a) and 6213(c). Under Notice , affected taxpayers are entitled to an additional 120 days to file a Tax Court petition in response to the notice of deficiency. In some cases, the period of limitations on assessment could expire prior to the expiration of the expanded period during which an affected taxpayer may file a Tax Court petition. (2) Similar to paragraph (1), if the last date otherwise prescribed by law for making a tax assessment is on or after November 2, 2001, and the taxpayer receives a 60 day postponement of time to file a Tax Court petition under paragraph (2) of the Additional Grant of Relief section of this notice, the last date otherwise prescribed by law for making a tax assessment is correspondingly postponed by 60 days. (3) Documents maintained by the IRS (including the Office of Chief Counsel) in New York City were destroyed or lost in the Terrorist Attack, or remain in buildings that are inaccessible. The destruction or loss of these documents (or the IRS s lack of access to them) will materially interfere with the IRS s ability to timely administer the Internal Revenue Code with respect to certain taxpayers. The taxpayers to whom these records relate are affected taxpayers for the limited purpose of this paragraph. In these cases, a 120 day postponement is granted for the following government acts if the last date for performance of the act is on or after November 2, 2001, and on or before November 30, 2001: making an assessment of any tax; issuing a statutory notice of deficiency; allowing a credit or refund of any tax; collecting by the Secretary, by levy or otherwise, the amount of any liability in respect of any tax; bringing suit by the United States, or any office on its behalf, in respect of any tax liability; returning property under section 6343; and the discharge of an executor from personal liability for a decedent s taxes under section The IRS will notify, as soon as practicable, any affected taxpayers, as defined under this paragraph, of the government act or acts that will be postponed. G. TAXPAYER INQUIRIES If you wish to recommend that other acts qualify for postponement under this notice, Notice , or Rev. Proc , please write to the Office of Associate Chief Counsel, Procedure and Administration (Administrative Provisions and Judicial Practice Division), CC:PA:APJP:Br2, 1111 Constitution Avenue, NW, Washington, DC 20224, or send an message to Notice.Comments@irscounsel.treas.gov. Please write 7508A List on the envelope or in the subject matter area of the . H. DRAFTING INFORMATION This notice was drafted by the Office of Associate Chief Counsel, Procedure and Administration (Administrative Provisions and Judicial Practice Division). For further information regarding this notice you may call the toll free disaster hotline at (866) or (202) (not a toll free call). 26 CFR : Time for performing certain acts postponed by reason of service in a combat zone or a Presidentially declared disaster. (Also Part I, 7508A; A 1.) 5HY3URF² SECTION 1. PURPOSE.01 This revenue procedure provides a list of time-sensitive acts, the performance of which may be postponed under sections 7508 and 7508A of the Internal Revenue Code (Code). Section 7508 of the Code postpones specified acts for individuals serving in the Armed Forces of the United States or serving in support of such Armed Forces in a combat zone. Section 7508A of the Code permits a postponement of specified acts for taxpayers affected by a Presidentially declared disaster. The list of acts in this revenue procedure supplements the list of postponed acts in section 7508(a)(1) of the Code and A-1(b) of the s on Procedure and Administration..02 This revenue procedure does not, by itself, provide any postponements under sections 7508 or 7508A. In order for taxpayers to be entitled to a postponement of any act listed in this reve- 1RYHPEHU ²,5%

2 nue procedure, the IRS generally will publish a Notice or other guidance providing relief with respect to a specific combat zone or Presidentially declared disaster..03 This revenue procedure will be updated as needed when the IRS determines that additional acts should be included in the list of postponed acts or that certain acts should be removed from the list. Also, taxpayers may recommend that additional acts be considered for postponement under sections 7508 and 7508A. See section 17 of this revenue procedure. SECTION 2. BACKGROUND.01 Section 7508(a)(1) of the Internal Revenue Code permits a postponement of certain time-sensitive acts for individuals serving in the Armed Forces or in support of such Armed Forces in an area designated by the President as a combat zone under section 112. Among these acts are the filing of returns, the payment of tax, the filing of a Tax Court petition, and the filing of a refund claim. In the event of service in a combat zone, the acts specified in section 7508(a)(1) of the Code are automatically postponed. In addition, if the Service publishes a Notice or other guidance providing additional relief under section 7508, some or all of the acts listed in this revenue procedure may be postponed. Likewise, acts not listed in this revenue procedure may be included in published guidance..02 Section 7508A of the Code provides that certain acts performed by taxpayers and the government may be postponed if the taxpayer is affected by a Presidentially declared disaster. A Presidentially declared disaster is defined in section 1033(h)(3) of the Code. Section A-1(d)(1) of the s on Procedure and Administration defines seven types of affected taxpayers, including any individual whose principal residence (for purposes of 1033(h)(4)) is located in a covered disaster area and any business entity or sole proprietor whose principal place of business is located in a covered disaster area. Postponements under section 7508A are not available simply because a disaster has occurred. Generally, the IRS will publish a Notice or other guidance authorizing the postponement. Such guidance will describe the acts postponed, the duration of the postponement, and the location of the covered disaster area. See, for example, Notice , I.R.B. 989 and Notice 97 62, C.B. 320, I.R.B. 8. When a notice or other guidance for a particular disaster is published, the guidance generally will refer to this revenue procedure and may provide for a postponement of all the acts listed in the regulations and this revenue procedure. Alternatively, the guidance may provide that only certain acts listed in this revenue procedure are postponed based on the time when the disaster occurred, its severity, and other factors. SECTION 3. SCOPE This revenue procedure applies to individuals serving in the Armed Forces in a combat zone, or in support of such Armed Forces, and to affected taxpayers within the meaning of A- 1(d)(1) of the s on Procedure and Administration. SECTION 4. APPLICATION.01 The tables below list sections of the Internal Revenue Code and Treasury s requiring the timely performance of specified acts that may be postponed under sections 7508 and 7508A..02 In order to avoid unnecessary duplication, the following tables do not include acts specified in sections 7508 or 7508A or the regulations thereunder. Thus, for example, no mention is made in the following tables of the filing of tax returns or the payment of taxes (or an installment thereof) because these acts are already covered by sections 7508 and 7508A and the regulations thereunder. Also, the following tables do not refer to the making of accounting method elections or any other elections required to be made on tax returns or attachments thereto. Reference to these elections is not necessary because postponement of the filing of a tax return automatically postpones the making of any election required to be made on the return or an attachment thereto..03 The following tables refer only to postponement of acts performed by taxpayers. Additional guidance will be published in the Internal Revenue Bulletin if a decision is made that acts performed by the government may be postponed under section 7508 or section 7508A. ²,5% 1RYHPEHU

3 SECTION 5. ACCOUNTING METHODS AND PERIODS 1. Chapter 1, Subchapter E of the Code 2. Treas (c)(4)-1 (d)(2) 3. Treas (c)(5)-1 (d)(2) 4. Treas (b)(1) 5. Treas T(b)(1) 6. Treas (e)(3)(i) Any act relating to the adoption, election, retention, or change of any accounting method or accounting period, or to the use of an accounting method or accounting period, that is required to be performed on or before the due date of a tax return (including extensions). Examples of such acts are (a) the requirement in Rev. Proc , section 6.02, that Form 1128 must be filed with the Director, Internal Revenue Service Center, on or before the due date of the tax return for the short period required to effect the change in accounting period; and (b) the requirement in Rev. Proc , section 6.02, that a copy of Form 3115 must be filed with the national office no later than when the original Form 3115 is filed with the timely filed tax return for the year of the accounting method change. If the acquiring corporation is not permitted to use the method of accounting used by the acquiring corporation, the method of accounting used by the distributor/transferor corporation, or the principal method of accounting; or if the corporation wishes to use a new method of accounting, then the acquiring corporation must apply to the Commissioner to use another method. Treas (c)(4) 1(d)(2) requires applications to be filed not later than 90 days after the date of distribution or transfer. Rev. Proc , C.B. 594, provides an automatic 90 day extension. If the acquiring corporation is not permitted to use the inventory method used by the acquiring corporation, the inventory method used by the distributor/transferor corporation, or the principal method of accounting, or wishes to use a new method of accounting, then the acquiring corporation must apply to the Commissioner to use another method. Treas (c)(5) 1(d)(2) requires applications to be filed not later than 90 days after the date of distribution or transfer. Rev. Proc provides an automatic 90-day extension. In order to secure prior approval of an adoption, change or retention of a taxpayer s annual accounting period, the taxpayer generally must file an application on Form 1128, Application to Adopt, Change, or Retain a Tax Year, with the Commissioner. The application must be filed on or before the 15th day of the second calendar month following the close of the short period. (But see Rev. Proc , I.R.B. 309, for automatic changes in annual accounting period that can be made with the return.) A section 444 election must be made by filing Form 8716, Election to Have a Tax Year Other Than a Required Tax Year, with the Service Center. Generally, Form 8716 must be filed by the earlier of (a) the 15th day of the fifth month following the month that includes the first day of the taxable year for which the election will first be effective, or (b) the due date (without regard to extensions) of the income tax return resulting from the section 444 election. To secure the Commissioner s consent to a change in method of accounting, the taxpayer must file an application on Form 3115, Application for Change in Accounting Method, with the Commissioner during the taxable year in which the taxpayer desires to make the change in method of accounting (i.e., must be filed by the last day of such taxable year). This filing requirement is also in Rev. Proc , C.B (But see Rev. Proc , C.B. 725, for automatic changes in method of accounting that can be made with the return.) 1RYHPEHU ²,5%

4 SECTION 5. ACCOUNTING METHODS AND PERIODS CONTINUED 7. Treas (c)(3)(ii) 8. Sec. 461(h)(3) 9. Treas T(a)(2),(3) and (4) 10. Rev. Proc , C.B. 396 A taxpayer may elect, with the consent of the Commissioner, to accrue real property taxes ratably in accordance with section 461(c). A written request for permission to make such an election must be submitted within 90 days after the beginning of the taxable year to which the election is first applicable. Rev. Proc provides an automatic 90-day extension. A taxpayer may elect the recurring item exception method of accounting under which certain items that are recurring in nature (for example, rebates, prizes, and provision of services under warranty contracts) are treated as incurred during a taxable year if, (among other requirements) for each such item, economic performance occurs within 8½-months after the close of the taxable year. A partnership or S corporation must file the Form 8752, Required Payment or Refund Under Section 7519, if the taxpayer has made an election under section 444 to use a taxable year other than its required taxable year and the election is still in effect. The Form 8752 must be filed and any required payment must be made by the date stated in the instructions to Form Certain partnerships, S corporations, corporations electing to be S corporations, or personal service corporations that desire to change or retain a tax year that is its natural business year, as defined in section 4.01(1) of Rev. Proc , and S corporations or corporations electing to be S corporations that desire to change to a tax year that meets the ownership tax year test set forth in section 4.02, must file Form 1128, Application to Adopt, Change, or Retain a Tax Year, with the Service Center on or before the 15th day of the second calendar month following the close of the short period for which a return is required. If a partnership, S corporation or a personal service corporation desires to retain a tax year not described in Rev. Proc , then the taxpayer should request permission to retain its tax year by filing Form 1128 on or before the 75th day of the tax year for which the retention is to apply. 11. Rev. Proc , section 6.02 An electing S corporation that desires to adopt, change to, or retain a tax year not described in Rev. Proc must request permission by filing Form 2553, Election by a Small Business Corporation, when the election to be an S corporation is filed. A developer of real estate requesting the Commissioner s consent to use the alternative cost method must file a private letter ruling request within 30 days after the close of the taxable year in which the first benefitted property in the project is sold. The request must include a consent extending the period of limitation on the assessment of income tax with respect to the use of the alternative cost method. ²,5% 1RYHPEHU

5 SECTION 6. BUSINESS AND INDIVIDUAL TAX ISSUES 1. Treas T(b), Q&A-7 2. Treas Treas (b)(4)(ii)(A) 4. Sec. 118(c)(2) 5. Treas A- 5(a)(2) A payer spouse may send cash to a third party on behalf of a spouse that qualifies for alimony or separate maintenance payments if the payments are made to the third party at the written request or consent of the payee spouse. The request or consent must state that the parties intend the payment to be treated as an alimony payment to the payee spouse subject to the rules of section 71. The payer spouse must receive the request or consent prior to the date of filing of the payer spouse s first return of tax for the taxable year in which the payment was made. A taxpayer who receives a loan from the Commodity Credit Corporation may elect to include the amount of the loan in his gross income for the taxable year in which the loan is received. The taxpayer in subsequent taxable years must include in his gross income all amounts received during those years as loans from the Commodity Credit Corporation, unless he secures the permission of the Commissioner to change to a different method of accounting. Treas requires such requests to be filed within 90 days after the beginning of the taxable year of change. Rev. Proc provides an automatic 90-day extension. The lessee must expend its construction allowance on the qualified long-term real property within eight and one-half months after the close of the taxable year in which the construction allowance was received. A contribution in aid of construction received by a regulated public utility that provides water or sewerage disposal services must be expended by the utility on qualifying property before the end of the second taxable year after the year in which it was received by the utility. A contribution of an undivided present interest in tangible personal property shall be treated as made upon receipt by the donee of a formally executed and acknowledged deed of gift. However, the period of initial possession by the donee may not be deferred for more than one year. 6. Sec. 468A(g) A taxpayer that makes payments to a nuclear decommissioning fund with respect to a taxable year must make the payments within 2½ months after the close of such taxable year (the deemed payment date). 7. Sec. 530(h) A trustee of a Coverdell education savings account must provide certain information concerning the account to the beneficiary by January 31 following the calendar year to which the information relates. In addition, Form 5498 must be filed with the IRS by May 31 following the calendar year to which the information relates. 8. Sec. 563(a) In the determination of the dividends paid deduction for purposes of the accumulated earnings tax imposed by section 531, a dividend paid after the close of any taxable year and on or before the 15th day of the third month following the close of such taxable year shall be considered as paid during such taxable year. The close of the taxable year is not affected by this revenue procedure; the 3½-month period within which the dividend is paid is the period extended. 9. Sec. 563(b) In the determination of the dividends paid deduction for purposes of the personal holding company tax imposed by section 541, a dividend paid after the close of any taxable year and on or before the 15th day of the third month following the close of such taxable year shall, to the extent the taxpayer elects on its return for the taxable year, be considered as paid during such taxable year. The close of the taxable year is not affected by this revenue procedure; the 3½ -month period within which the dividend is paid is the period extended. 10. Sec. 563(c) In the determination of the dividends paid deduction for purposes of part III, a dividend paid after the close of any taxable year and on or before the 15th day of the third month following the close of such taxable year shall, to the extent the company designates such dividend as being taken into account, be considered as paid during such taxable year. The close of the taxable year is not affected by this revenue procedure; the 3½-month period within which the dividend is paid is the period extended. 1RYHPEHU ²,5%

6 SECTION 6. BUSINESS AND INDIVIDUAL TAX ISSUES CONTINUED 11. Treas A- 3(h)(1)(v) 12. Treas A- 3(h)(1)(vii) 13. Sec. 529 (c)(3)(c)(i) 14. Sec. 530(d)(4)(C) (i) 15. Sec. 530(d)(5) A taxpayer must file a request for a schedule of ruling amounts for a nuclear decommissioning fund by the deemed payment date (2½-months after the close of the taxable year for which the schedule of ruling amounts is sought). A taxpayer has 30 days to provide additional requested information with respect to a request for a schedule of ruling amounts. If the information is not provided within the 30 days, the request will not be considered filed until the date the information is provided. A rollover contribution to another qualified tuition program must be made no later than the 60th day after the date of a distribution from a qualified tuition program. Excess contributions to a Coverdell education savings account must be distributed before a specified time in the taxable year following the taxable year in which the contribution is made. A rollover contribution to another Coverdell education savings account must be made no later than the 60th day after the date of a payment or distribution from a Coverdell education savings account. 16. Sec. 563(d) For the purpose of applying section 562(a), with respect to distributions under subsection (a), (b), or (c) of section 562, a distribution made after the close of the taxable year and on or before the 15th day of the third month following the close of the taxable year shall be considered as made on the last day of such taxable year. The close of the taxable year is not affected by this revenue procedure; the 3½-month period within which the dividend is paid is the period extended. 17. Sec. 1031(a) Any property received by the taxpayer shall be treated as property which is not like-kind property if - (A) such property is not identified as property to be received in the exchange on or before the day which is 45 days after the date on which the taxpayer transfers the property relinquished in the exchange, or (B) such property is received after the earlier of (i) the day which is 180 days after the date on which the taxpayer transfers the property relinquished in the exchange, or (ii) the due date (determined with regard to extension) for the transferor s return of the tax imposed by this chapter for the taxable year in which the transfer of the relinquished property occurs. 18. Sec. 1043(a) If an eligible person (as defined under section 1043(b)) sells any property pursuant to a certificate of divestiture, then at the election of the taxpayer, gain from such sale shall be recognized only to the extent that the amount realized on such sale exceeds the cost of any permitted property purchased by the taxpayer during the 60-day period beginning on the date of such sale. 19. Sec. 1045(a) A taxpayer other than a corporation may elect to roll over gain from the sale of qualified small business stock held for more than six months if other qualified small business stock is purchased by the taxpayer during the 60-day period beginning on the date of sale. 20. Sec. 1382(d) An organization, to which section 1382(d) applies, is required to pay a patronage dividend within 8½ months after the close of the year. 21. Sec. 1388(j)(3)(A) 22. Treas (c) Any cooperative organization that exercises its option to net patronage gains and losses, is required to give notice to its patrons of the netting by the 15th day of the 9th month following the close of the taxable year. The effective date of an entity classification election (Form 8832) cannot be more than 75 days prior to the date on which the election is filed. ²,5% 1RYHPEHU

7 SECTION 6. BUSINESS AND INDIVIDUAL TAX ISSUES CONTINUED 23. Treas (b) (d) 24. Treas (a)(1) An automatic extension of 6 months from the due date of a return, excluding extensions, is granted to make the regulatory of statutory elections whose due dates are the due date of the return or the due date of the return including extensions (for example, an application to change a method of accounting under Rev. Proc ), provided the taxpayer (a) timely filed its return for the year of election, (b) within that 6-month extension period, takes the required corrective action to file the election in accordance with the statute, regulations, revenue procedure, revenue ruling, notice or announcement permitting the election, and (c) writes at the top of the return, statement of election or other form FILED PURSUANT TO An automatic extension of 12 months from the due date for making a regulatory election is granted to make certain elections, including the election to use other than the required taxable year under section 444, and the election to use LIFO under section 472. SECTION 7. CORPORATE ISSUES 1. Sec. 302(e)(1) A corporation must complete a distribution in pursuance of a plan of partial liquidation of a corporation within the specified period. 2. Sec. 303 and Treas A corporation must complete the distribution of property to a shareholder in redemption of all or part of the stock of the corporation which (for Federal estate tax purposes) is included in determining the estate of a decedent. Section require, 3. Sec. 304(b)(3)(C) 4. Sec. 332(b) and Sec. 338(d)(3) and (h), and Treas Sec. 338(g) Sec. 338(h)(10) and Treas. 338(h)(10)- 1(c) 8. Sec. 341 and Treas among other things, that the distribution occur within the specified period. If certain requirements are met, section 304(a) does not apply to a transaction involving the formation of a bank holding company. One requirement is that within a specified period (generally 2 years) after control of a bank is acquired, stock constituting control of the bank is transferred to a bank holding company in connection with the bank holding company s formation. A corporation must completely liquidate a corporate subsidiary within the specified period. An acquiring corporation must complete a qualified stock purchase of a target corporation s stock within the specified acquisition period. An acquiring corporation may elect to treat certain stock purchases as asset acquisitions. The election must be made within the specified period. An acquiring corporation and selling group of corporations may elect to treat certain stock purchases as asset purchases, and to avoid gain or loss upon the stock sale. The election must be made within the specified period. A shareholder of a collapsible corporation must sell its stock in the corporation within the specified period. 1RYHPEHU ²,5%

8 SECTION 7. CORPORATE ISSUES CONTINUED 9. Treas (c)(17)- 1(c) 10. Sec. 562(b)(1)(B) An acquiring corporation files a Form 976, Claim for Deficiency Dividends Deduction by a Personal Holding Company, Regulated Investment Company, or Real Estate Investment Trust, within 120 days after the date of the determination under section 547(c) to claim a deduction of a deficiency dividend. In the case of a complete liquidation (except in the case of a complete liquidation of a personal holding company or foreign personal holding company) occurring within 24 months after the adoption of a plan of liquidation, any distribution within such period pursuant to such plan shall, to the extent of the earnings and profits (computed without regard to capital losses) of the corporation for the taxable year in which such distribution is made, be treated as a dividend for purposes of computing the dividends paid deduction. 11. Sec. 562(b)(2) In the case of a complete liquidation of a personal holding company occurring within 24 months after the adoption of a plan of liquidation, the amount of any distribution within such period pursuant to such plan shall be treated as a dividend for purposes of computing the dividends paid deduction to the extent that such is distributed to corporate distributees and represents such corporate distributees allocable share of the undistributed personal holding company income for the taxable year of such distribution. 12. Sec and Treas (c)(1)(i) 13. Sec SECTION 8. EMPLOYEE BENEFIT ISSUES A common parent must apply for permission to discontinue filing consolidated returns within a specified period after the date of enactment of a law affecting the computation of tax liability. Corporations applying for an adjustment of an overpayment of estimated income tax must file Form 4466, Corporation Application for Quick Refund of Overpayment of Estimated Tax, on or before the 15th day of the third month after the taxable year, or before the date the corporation first files its income tax return for such year, whichever is earlier. 1. Sec. 72(p)(2)(B) and (C), and Treas. 1.72(p) 1, Q&A Sec. 72(t)(2)(A)(iv) 3. Sec. 72(t)(2)(F) 4. Sec. 83(b) (a) 5. Proposed Treas , Q&A-15 A loan from a qualified employer plan to a participant in, or a beneficiary of, such plan must be repaid according to certain time schedules specified in section 72(p)(2)(B) and (C) (including, if applicable, any grace period granted pursuant to Treas. 1.72(p)-1, Q&A-10). Under section 72(t)(2)(A)(iv), to avoid the imposition of a 10-percent additional tax on a distribution from a qualified retirement plan, the distribution must be part of a series of substantially equal periodic payments, made at least annually. To avoid the imposition of a 10-percent additional tax on a distribution from an individual retirement arrangement (IRA) for a first-time home purchase, such distribution must be used within 120 days of the distribution to pay qualified acquisition costs or rolled into an IRA. Any person who performs services in connection with which property is transferred to any person may elect not later than 30 days after the date of the transfer of the property to include in his gross income, for the taxable year in which such property is transferred, the excess of the fair market value of the property over the amount (if any) paid for the property. Cafeteria plan participants will avoid constructive receipt of the taxable amounts if they elect the benefits they will receive before the beginning of the period during which the benefits will be provided. ²,5% 1RYHPEHU

9 SECTION 8. EMPLOYEE BENEFIT ISSUES CONTINUED 6. Proposed Treas , Q&A-14 and Proposed Treas , Q&A-7 7. Proposed Treas , Q&A-5 8. Treas (e)(2) Cafeteria plan participants will not be in constructive receipt if, at the end of the plan year, they forfeit amounts elected but not used during the plan year. Cafeteria plan participants may receive in cash the value of unused vacation days on or before the earlier of the last day of the cafeteria plan year or the last day of the employee s taxable year to which the unused days relate. A performance goal is considered pre-established if it is established in writing by the corporation s compensation committee not later than 90 days after the commencement of the period of service to which the performance goal relates if the outcome is substantially uncertain at the time the compensation committee actually establishes the goal. In no event, however, will the performance goal be considered pre-established if it is established after 25 percent of the period of service has elapsed. 9. Sec. 220(f)(5) A rollover contribution to an Archer MSA must be made no later than the 60th day after the day on which the holder receives a payment or distribution from an Archer MSA. 10. Sec. 220(h) A trustee or custodian of an MSA (Archer MSA or Medicare+Choice MSA) must provide certain information concerning the MSA to the account holder by January 31 following the calendar year to which the information relates. In addition, MSA contribution information must be furnished to the account holder, and Form 5498, IRA Contribution Information, filed with the IRS, by May 31 following the calendar year to which the information relates. 11. Secs. 401(a)(9), 403(a)(1), 403(b)(10), 408(a)(6), 408(b)(3) and 457(d)(2) 12. Sec. 401(a)(28)(B) (i) 13. Sec. 401(a)(28)(B) (ii) 14. Sec. 401(a)(30) 1.401(a)-30 and 1.402(g)-1 The first required minimum distribution from plans subject to the rules in section 401(a)(9) must be made no later than the required beginning date. Subsequent required minimum distributions must be made by the end of each distribution calendar year. A qualified participant in an ESOP (as defined in section 401(a)(28)(B)(iii)) may elect within 90 days after the close of each plan year in the qualified election period (as defined in section 401(a)(28)(B)(iv)) to direct the plan as to the investment of at least 25 percent of the participant s account in the plan (50 percent in the case of the last election). A plan must distribute the portion of the participant s account covered by an election under section 401(a)(28)(B)(i) within 90 days after the period during which an election can be made; or the plan must offer at least 3 investment options (not inconsistent with regulations prescribed by the Secretary) to each participant making the election under section 401(a)(28)(B)(i) and within 90 days after the period during which the election may be made, the plan must invest the portion of the participant s account in accordance with the participant s election. Excess deferrals for a calendar year, plus income attributable to the excess, must be distributed no later than the first April 15 following the calendar year. 1RYHPEHU ²,5%

10 SECTION 8. EMPLOYEE BENEFIT ISSUES CONTINUED 15. Sec. 401(b) 1.401(b) Sec. 401(k)(8) 17. Sec. 401(m)(6) 18. Sec. 402(g)(2)(A) 1.402(g) Sec. 404(k)(2)(A) (ii) 20. Secs. 408(i) and 6047(c) 21. Sec. 409(h)(4) 22. Sec. 409(h)(5) 23. Sec. 409(h)(6) A retirement plan that fails to satisfy the requirements of section 401(a) or section 403(a) on any day because of a disqualifying provision will be treated as satisfying such requirements on such day if, prior to the expiration of the applicable remedial amendment period, all plan provisions necessary to satisfy the requirements of section 401(a) or 403(a) are in effect and have been made effective for the whole of such period. A cash or deferred arrangement must distribute excess contributions for a plan year, plus income attributable to the excess, pursuant to the terms of the arrangement no later than the close of the following plan year. A plan subject to section 401(m) must distribute excess aggregate contributions for a plan year, plus income attributable to the excess, pursuant to the terms of the plan no later than the close of the following plan year. An individual with excess deferrals for a taxable year must notify a plan, not later than a specified date following the taxable year, that excess deferrals have been contributed to that plan for the taxable year. A distribution of excess deferrals identified by the individual, plus income attributable to the excess, must be accomplished no later than the first April 15 following the taxable year of the excess. An ESOP receiving dividends on stock of the C corporation maintaining the plan must distribute the dividend in cash to participants or beneficiaries not later than 90 days after the close of the plan year in which the dividend was paid. A trustee or issuer of an individual retirement arrangement (IRA) must provide certain information concerning the IRA to the IRA owner by January 31 following the calendar year to which the information relates. In addition, IRA contribution information must be furnished to the owner, and Form 5498, Individual Retirement Arrangement Information, filed with the IRS, by May 31 following the calendar year to which the information relates. An employer required to repurchase employer securities under section 409(h)(1)(B) must provide a put option for a period of at least 60 days following the date of distribution of employer securities to a participant, and if the put option is not exercised, for an additional 60-day period in the following plan year. A participant who receives a distribution of employer securities under section 409(h)(1)(B) must exercise the put option provided by that section within a period of at least 60 days following the date of distribution, or if the put option is not exercised within that period, for an additional 60-day period in the following plan year. An employer required to repurchase employer securities distributed as part of a total distribution must pay for the securities in substantially equal periodic payments (at least annually) over a period beginning not later than 30 days after the exercise of the put option and not exceeding 5 years. An employer required to repurchase employer securities distributed as part of an installment distribution must pay for the securities not later than 30 days after the exercise of the put option under section 409(h)(4). 24. Sec. 409(o) An ESOP must commence the distribution of a participant s account balance, if the participant elects, not later than 1 year after the close of the plan year i) in which the participant separates from service by reason of attaining normal retirement age under the plan, death or disability; or ii) which is the 5th plan year following the plan year in which the participant otherwise separates from service (except if the participant is reemployed before distribution is required to begin). 25. Sec. 1042(a)(2) 26. Treas T, Q&A-3 A taxpayer must purchase qualified replacement property (defined in section 1042(c)(4)) within the replacement period, defined in section 1042(c)(3) as the period which begins 3 months before the date of the sale of qualified securities to an ESOP and ends 12 months after the date of such sale. A taxpayer must notarize any statement of purchase with respect to qualified replacement property required under Treas T, Q&A-3 no later than 30 days after a purchase of qualified replacement property. ²,5% 1RYHPEHU

11 SECTION 8. EMPLOYEE BENEFIT ISSUES CONTINUED 27. Sec. 4972(c)(3) 28. Sec Secs. 6033, 6039D, 6047, 6057, 6058, and 6059 Nondeductible plan contributions must be distributed prior to a certain date to avoid a 10 percent tax. A 10 percent tax on the amount of excess contributions and excess aggregate contributions under a plan for a plan year will be imposed unless the excess, plus income attributable to the excess is distributed (or, if forfeitable, forfeited) no later than 2½-months after the close of the plan year. In the case of an employer maintaining a SARSEP, employees must be notified of the excess by the employer within the 2½-month period to avoid the tax. Form 5500 and Form 5500-EZ, which are used to report annual information concerning employee benefit plans and fringe benefit plans, must be filed by a specified time. General Advice Affected filers are advised to follow the instructions accompanying the Form 5500 series (or other guidance published on the postponement) regarding how to file the forms when postponements are granted pursuant to section 7508 or section 7508A. Combat Zone Postponements under Section 7508 In the case of taxpayers who are individuals, the IRS may permit a postponement of the filing of the Form 5500 or Form 5500-EZ under section Whatever postponement of the Form 5500 series filing due date is permitted by the IRS under section 7508 will also be permitted by the Department of Labor and the Pension Benefit Guaranty Corporation (PBGC) for similarly situated individuals who are plan administrators. Postponements for Presidentially Declared Disasters under Section 7508A 30. Rev. Proc , Sections 9.02(1), (2) and (3) 31. Rev. Proc , Section Rev. Proc , Section In the case of affected taxpayers, as defined in Treas A-1(d), the IRS may permit a postponement of the filing of the Form 5500 or Form 5500-EZ. Taxpayers who are unable to obtain on a timely basis information necessary for completing the forms from a bank, insurance company, or any other service provider because such service providers operations are located in a covered disaster area will be treated as affected taxpayers. Whatever postponement of the Form 5500 series filing due date is permitted by the IRS under section 7508A will also be permitted by the Department of Labor and PBGC for similarly situated plan administrators and direct filing entities. The correction period for self-correction of operational failures is the last day of the second plan year following the plan year for which the failure occurred. The correction period for self-correction of operational failures for transferred assets does not end until the last day of the first plan year that begins after the corporate merger, acquisition, or other similar employer transaction. If the submission involves a plan with transferred assets and the IRS determines that none of the failures in the submission occurred after the end of the second plan year that begins after the corporate merger, acquisition or other similar employer transaction, the plan sponsor may calculate the amount of plan assets and number of plan participants based on the Form 5500 information that would have been filed by the plan sponsor for the plan year that includes the employer transaction if the transferred assets were maintained as a separate plan. If an examination involves a plan with transferred assets and the IRS determines that the failures did not occur after the end of the second plan year that begins after the corporate merger, acquisition, or other similar employer transaction occurred, the sanction under Audit CAP will not exceed the sanction that would apply if the transferred assets were maintained as a separate plan. 1RYHPEHU ²,5%

12 SECTION 9. ESTATE, GIFT AND TRUST ISSUES 1. Sec. 643(g) The trustee may elect to treat certain payments of estimated tax as paid by the beneficiary. The election shall be made on or before the 65th day after the close of the taxable year of the trust. 2. Sec. 2011(c) The executor of a decedent s estate must file a claim for a credit for state estate, inheritance, legacy or succession taxes by filing a claim within 4 years of filing Form 706, United States Estate (and Generation Skipping Transfer) Tax Return. 3. Sec. 2014(e) The executor of a decedent s estate must file a claim for foreign death taxes within 4 years of filing Form 706, United States Estate (and Generation Skipping Transfer) Tax Return. 4. Sec and Treas. If an executor of a decedent s estate (or any other person) receives a refund of any state or foreign death taxes claimed as a credit on Form 706, the IRS must be notified within 30 days of receipt Sec. 2031(c) If an executor of a decedent s estate elects on Form 706 to exclude a portion of the value of land that is subject to a qualified conservation easement, agreements relating to development rights must be implemented within 2 years after the date of the decedent s death. 6. Sec. 2032(d) The executor of a decedent s estate may elect an alternate valuation on a late filed Form 706 if the Form 706 is not filed later than 1 year after the due date. 7. Sec. 2032A(c)(7) 8. Sec. 2032A(d)(3) A qualified heir, with respect to specially valued property, is provided a two-year grace period immediately following the date of the decedent s death in which the failure by the qualified heir to begin using the property in a qualified use will not be considered a cessation of qualified use and therefore will not trigger additional estate tax. The executor of a decedent s estate has 90 days after notification of incomplete information/signatures to provide the information/signatures to the IRS regarding an election on Form 706 with respect to specially valued property. 9. Sec A taxpayer may make a qualified disclaimer no later than 9 months after the date on which the transfer creating the interest is made, or the date the person attains age Sec. 2053(d) (c) and 10(c) 11. Sec. 2055(e)(3) If the executor of a decedent s estate elects to take a deduction for state and foreign death tax imposed upon a transfer for charitable or other uses, the executor must file a written notification to that effect with the IRS before expiration of the period of limitations on assessments (generally 3 years). A party in interest must commence a judicial proceeding to change an interest into a qualified interest no later than the 90th day after the estate tax return (Form 706) is required to be filed or, if no return is required, the last date for filing the income tax return for the first taxable year of the trust. 12. Sec. 2056(d) A qualified domestic trust (QDOT) election must be made on Form 706, Schedule M, and the property must be transferred to the trust before the date on which the return is made. Any reformation to determine if a trust is a QDOT requires that the judicial proceeding be commenced on or before the due date for filing the return. 13. Sec. 2056A(b)(2) 14. Sec. 2057(i)(3)(G) The trustee of a QDOT must file a claim for refund of excess tax no later than 1 year after the date of final determination of the decedent s estate tax liability. A qualified heir, with respect to qualified family owned business, has a two-year grace period immediately following the date of the decedent s death in which the failure by the qualified heir to begin using the property in a qualified use will not be considered a cessation of qualified use and therefore will not trigger additional estate tax. ²,5% 1RYHPEHU

13 SECTION 9. ESTATE, GIFT AND TRUST ISSUES CONTINUED 15. Sec. 2057(i)(3)(H) The executor of a decedent s estate has 90 days after notification of incomplete information/signatures to provide the information/signatures to the IRS regarding an election on Form 706 with respect to specially valued property. 16. Sec The IRS will treat certain transfers as made for full and adequate consideration in money or money s worth where husband and wife enter into a written agreement relative to their marital and property rights and divorce actually occurs within the 3-year period beginning on the date 1 year before such agreement is entered into. 17. Sec. 2518(b) A taxpayer may make a qualified disclaimer no later than 9 months after the date on which the transfer creating the interest is made, or the date the person attains age Sec (b) SECTION 10. EXEMPT ORGANIZATION ISSUES The IRS recognizes the division of a trust for generation-skipping transfer tax purposes if the severance occurs (or a reformation proceeding, if required, is commenced) prior to the date prescribed for filing the estate tax return, Form Sec. 505(c)(1) 2. Sec. 508 and Treas Sec. 6072(e) (e) An organization must give notice by filing Form 1024, Application for Recognition of Exemption Under Section 501(a), to be recognized as an organization exempt under section 501(c)(9) or section 501(c)(17). Generally, if the exemption is to apply for any period before the giving of the notice, Treas. 505(c)-1T, Q&A-6, of the regulations requires that Form 1024 be filed within 15 months from the end of the month in which the organization was organized. A purported section 501(c)(3) organization must generally file Form 1023, Application for Recognition of Exemption, to qualify for exemption. Generally, if the exemption is to apply for any period before the giving of the notice, the Form 1023 must be filed within 15 months from the end of the month in which the organization was organized. Annual returns of organizations exempt under section 501(a) must be filed on or before the 15th day of the 5th month following the close of the taxable year. SECTION 11. EXCISE TAX ISSUES 1. Treas (h)(v) 2. Sec. 4221(b) (c) 3. Sec. 4221(b) (c) A registrant must notify the IRS of any change in the information a registrant has submitted within 10 days. A manufacturer is allowed to make a tax-free sale of articles for resale to a second purchaser for use in further manufacture. This rule ceases to apply six months after the earlier of the sale or shipment date unless the manufacturer receives certain proof. A manufacturer is allowed to make a tax-free sale of articles for export. This rule ceases to apply six months after the earlier of the sale or shipment date unless the manufacturer receives certain proof. 1RYHPEHU ²,5%

14 SECTION 11. EXCISE TAX ISSUES CONTINUED 4. Sec. 4221(e)(2)(A) (c) A manufacturer is allowed to make a tax-free sale of tires for use by the purchaser in connection with the sale of another article manufactured or produced by the purchaser. This rule ceases to apply six months after the earlier of the sale or shipment date unless the manufacturer receives certain proof. SECTION 12. INTERNATIONAL ISSUES 1. Sec. 482 and Treas (g)(4)(ii)(C) 2. Sec. 482 and Treas (j)(2) 3. Sec. 482 and Treas (j)(2) 4. Treas (d)(2)(ii)(A) (2) 5. Treas (d)(2)(iii)(A) (1) 6. Treas T(b)(3)(i) 7. Treas (b)(3)(ii)(B) 8. Sec. 922(a)(1)(E) (j) (Q&A-19) 9. Sec. 924(b)(2)(B) 1.924(a)- 1T(j)(2)(i) A claim for a setoff of a section 482 allocation by the IRS must be filed within 30 days of either the date of the IRS s letter transmitting an examination report with notice of the proposed adjustment or the date of a notice of deficiency. A claim for retroactive application of the final section 482 regulations, otherwise effective only for taxable years beginning after October 6, 1994, must be filed prior to the expiration of the statute of limitations for the year for which retroactive application is sought. A participant in a cost-sharing arrangement must provide documentation regarding the arrangement, as well as documentation specified in Treas (b)(4) and (c)(1), within 30 days of a request by the IRS. Liabilities of a foreign corporation that is not a bank must be entered on a set of books at a time reasonably contemporaneous with the time the liabilities are incurred. Liabilities of foreign corporations that are engaged in a banking business must be entered on a set of books relating to an activity that produces ECI before the close of the day on which the liability is incurred. Requirement that marketable securities be identified on the books of a U.S. trade or business within 30 days of the date an equivalent amount of U.S. assets ceases to be U.S. assets. This requirement applies when a taxpayer has elected to be treated as remaining engaged in a U.S. trade or business for branch profits tax purposes. Requirement that a foreign corporation which identifies liabilities as giving rise to U.S. branch interest, send a statement to the recipients of such interest within two months of the end of the calendar year in which the interest was paid, stating that such interest was U.S. source income (if the corporation did not make a return pursuant to section 6049 with respect to the interest payment). The FSC must appoint a new non-u.s. resident director within 30 days of the date of death, resignation, or removal of the former director, in the event that the sole non-u.s. resident director of a FSC dies, resigns, or is removed. A taxpayer must execute an agreement regarding unequal apportionment at a time when at least 12 months remain in the period of limitations (including extensions) for assessment of tax with respect to each shareholder of the small FSC in order to apportion unequally among shareholders of a small FSC the $5 million foreign trading gross receipts used to determine exempt foreign trade income. ²,5% 1RYHPEHU